Danger, Danger, Thomas Friedman Is Writing on Economics AgainComments for Danger, Danger, Thomas Friedman Is Writing on Economics Again at http://www.cepr.net , comment 1 to 32 out of 20 commentshttp://www.cepr.net
Tue, 03 Mar 2015 18:10:13 +0100FeedCreator 1.7.3moncler jackets menhttp://www.cepr.net/index.php/blogs/beat-the-press/danger-danger-thomas-friedman-is-writing-on-economics-again#comment-5205
Moncler jackets on sale sports apparel company established in 1952 Rome, Texas Lemon village in the French Alps. In an unprecedented social shop moncler sale is the inventor of the famous hot, very light, ideal for all winter ski clothes simple colors. Moncler jackets for cheap and comfortable port of French fashion is not so outdated. We believe - moncler jacketsTue, 23 Nov 2010 17:18:26 +0100...http://www.cepr.net/index.php/blogs/beat-the-press/danger-danger-thomas-friedman-is-writing-on-economics-again#comment-2746
To Ralph: this is very self-contradictory statement and circular logic.
"Plus when inflation looms..." And what causes inflation? Deficits and money printing perhaps?
- WesFri, 10 Sep 2010 01:10:59 +0100To Wes:http://www.cepr.net/index.php/blogs/beat-the-press/danger-danger-thomas-friedman-is-writing-on-economics-again#comment-2717
Wes: I’m not suggesting that ALL government spending should be funded by a deficit, and nor does anyone suggest that. On the other had SOME deficit is desirable. Indeed, deficits tend to be the rule rather than the exception in most years in most countries. The basic reason for this stems from, 1, the general acceptance that a small amount of inflation is desirable (rather than zero inflation, and 2, economic growth. I’ll explain.
If national debt (ND) and the monetary base (MB) are to stay constant in real terms, then given that they are shrinking in nominal terms because of inflation, governments have to create or print money to top up ND and MB. I.e. deficits are needed to top up ND and MB. Also, where an economy expands in real terms, if ND and MB are to remain constant as a proportion of GDP, the even more “topping up” is required.
And there is yet another good reason for deficits (and surpluses). Given unemployment, a deficit will help boost demand and create jobs. Plus when inflation looms, a surplus will rein in money (and demand) and help contain inflation.
- Ralph MusgraveWed, 08 Sep 2010 05:06:21 +0100...http://www.cepr.net/index.php/blogs/beat-the-press/danger-danger-thomas-friedman-is-writing-on-economics-again#comment-2699
What about the impact of interest rates? Wouldn't the government lose when the Fed raises the interest rates? Or perhaps the benefits of the deficit funding would be greater than any potential loss on the bonds? For lack of a better word, it would have a multiplier effect? - JayTue, 07 Sep 2010 16:43:12 +0100The Apologyhttp://www.cepr.net/index.php/blogs/beat-the-press/danger-danger-thomas-friedman-is-writing-on-economics-again#comment-2698
A number of months ago, I took Thomas Friedman to task in my response to another of Dean's critiques of one of Friedman's columns. The topic then was his insistence (Friedman's) on calling our parents' (we boomers') the greatest generation. I presented a veritable history of our parents' shortcomings and denounced his exaggerated respect as adolescent.
I see now that I was mistaken. He was right. Their's was the greatest generation--or greater than ours at any rate. I'm here now to make a public apology to Thomas. You rock dude.
And what was this generation that was so sublime? In a word, Socialist. A generation that elected Franklin Roosevelt to four consecutive terms. A generation that embraced a president who implemented government policy that reached into every corner of corporate and financial dealings, while winning a two front war. The list of government programs that inhibited elite power and enhanced the quality of life for the middle class is extensive, and there is no point in repeating what historians have thoroughly documented.
In contrast, we have allowed our lives to be derailed by the empty promises issuing from the mouth of an actor, the happy face of American corporate advertising playing the most important role of his life as the congenial persona for the movement that has swindled our generation out of its rights and social inheritance, all in the name of the virility of free markets. Again, capitalism has failed to deliver on its promises. Again, free markets have proven to be an illusion, or rather a cover for manipulation and shenanigans. And we (the first T.V. generation) fell for the ad-man's pitch.
If someone like Friedman choses to rub our face in the fact that we have failed to live up to the socialist dream envisioned by our parents and their parents, I suppose we deserve it. It's a bitter potion, but we must drink the cup to the dregs. Before we can change our lives, we must first acknowledge the truth. - dieselTue, 07 Sep 2010 16:39:43 +0100Ok, I clearly had a bad econ 101 teacherhttp://www.cepr.net/index.php/blogs/beat-the-press/danger-danger-thomas-friedman-is-writing-on-economics-again#comment-2697
Or maybe I was taught in a different country without your magical "Federal Reserve". Your government can sell any amount of bonds, to the Fed, which then have zero interest burden (since the interest is credited back - ?) and can also direct the Fed to hold the indefinitely so there is no principal repayment? I've heard suspicious arguments about the ease of government borrowing now due to very low interest rates, but it doesn't seem your argument depends on this - it's true independent of rate. Are you really saying this? US borrowing of any amount at any rate is free?
I would absolutely love to be pointed an an economics 101 textbook that claimed anything remotely close to your claim. Or an economics 101 professor who'd sign his name to this. Please? I am serious; what you say seems absurd but I'd love to be educated.
- bxgTue, 07 Sep 2010 16:08:51 +0100...http://www.cepr.net/index.php/blogs/beat-the-press/danger-danger-thomas-friedman-is-writing-on-economics-again#comment-2696
"Bleeding heart liberals" were against the invasion of Iraq...
BTW, not true in every case. Many (including in Congress and, say, NY times) were among the worst warmongers.
- WesTue, 07 Sep 2010 14:21:19 +0100...http://www.cepr.net/index.php/blogs/beat-the-press/danger-danger-thomas-friedman-is-writing-on-economics-again#comment-2695
I was against the Iraq invasion too. BTW, I voted for Ron Paul - just to describe my political preferences in a few words.
- WesTue, 07 Sep 2010 14:14:07 +0100Social Securityhttp://www.cepr.net/index.php/blogs/beat-the-press/danger-danger-thomas-friedman-is-writing-on-economics-again#comment-2694
Dean or others, one thing I don't understand is that people talk about social security defecits going out to 2075 or so. It seems to this innocent mind that the whole problem with that program as well as Medicare etc. is the Babyboom generation. We seem to be a giant bubble going through the system and after we die things should stabalize. - MikeTue, 07 Sep 2010 13:02:35 +0100...http://www.cepr.net/index.php/blogs/beat-the-press/danger-danger-thomas-friedman-is-writing-on-economics-again#comment-2693
[b]Jim[/b] wrote, [quote]The approach I favor would eliminate unemployment and poverty as there would never be insufficient purchasing power in society.[/quote]
Wishful thinking.
The main cause of poverty in modern nations is that poor people have to pay landowners money in order to have a place to live or grow crops, even though landowners didn't create the land or the value it represents. - liberalTue, 07 Sep 2010 11:17:50 +0100...http://www.cepr.net/index.php/blogs/beat-the-press/danger-danger-thomas-friedman-is-writing-on-economics-again#comment-2691
[b]Wes[/b] wrote,
[quote]So I guess deficits and debt do matter after all. Unless you are a bleeding heart liberal of course.[/quote]
That's a peculiar statement. "Bleeding heart liberals" were against the invasion of Iraq, which has cost us the better part of $1T directly, and probably many times that in terms of indirect costs. - liberalTue, 07 Sep 2010 11:01:16 +0100...http://www.cepr.net/index.php/blogs/beat-the-press/danger-danger-thomas-friedman-is-writing-on-economics-again#comment-2678
"The government can sell the bonds needed to finance the debt to the Fed (which it is already doing to some extent). The Fed then simply holds the bonds indefinitely. This creates zero burden on the government, since the Fed refunds the interest earned on these bonds to the Treasury. My intro econ students all used to understand this -- I guess Friedman never took econ 101 or didn't have a very good teacher."
If they government sells the bonds, the buyer holds them and receives the interest. It then place a burden on the government.[i][/i] - Daniel HuntTue, 07 Sep 2010 01:54:36 +0100Peter Orzsag also lumping SS in budget deficithttp://www.cepr.net/index.php/blogs/beat-the-press/danger-danger-thomas-friedman-is-writing-on-economics-again#comment-2673
He thinks the Bush tax cuts should be extended for 2 more years. He thinks SS "should be reformed," and lumps it in with the other budget deficit. Doesn't he understand that SS is not part of the federal budget, but a stand alone insurance program with its own funds?
http://www.nytimes.com/2010/09/07/opinion/07orszag.html?hp - LJMMon, 06 Sep 2010 18:23:51 +0100...http://www.cepr.net/index.php/blogs/beat-the-press/danger-danger-thomas-friedman-is-writing-on-economics-again#comment-2672
When you drop money from helicopters some people benefit, but someone always pays - through higher taxes later, and through inflation tax. Mr. Dean Baker surely knows this, but conveniently prefers not to mention this.
I do not think highly of T. Friedman and his columns BTW. But yours is no better.
- WesMon, 06 Sep 2010 11:28:26 +0100...http://www.cepr.net/index.php/blogs/beat-the-press/danger-danger-thomas-friedman-is-writing-on-economics-again#comment-2671
Keynesian insight is a theory, one among many. It was widely considered to be discredited a few decades ago. Hopefully the current generation of Keynesians will help discredit it forever. - WesMon, 06 Sep 2010 11:06:24 +0100open mindhttp://www.cepr.net/index.php/blogs/beat-the-press/danger-danger-thomas-friedman-is-writing-on-economics-again#comment-2670
Wes,
No sense continuing this since you're obviously set in your political outlook. There's a great deal of strong theory behind the concept going back decades. It's widely accepted that unemployment, recessions, and depressions are caused by insufficient purchasing power. It's the fundamental Keynesian insight.
Talk about a straw man argument! I never proposed giving trillions to everyone. I proposed to generate enough purchasing power so that we don't have unemployment - big difference. There's no reason to think such a plan would be inflationary when there's vast unused resources.
I answered your original question because I thought you were sincerely curious. Sorry.
- JimMon, 06 Sep 2010 10:32:45 +0100...http://www.cepr.net/index.php/blogs/beat-the-press/danger-danger-thomas-friedman-is-writing-on-economics-again#comment-2669
"I would think there would normally not be a need to tax middle income and below, at least not greatly"
I am not rich, I work for a living, but I have to pay a lot in taxes. This was my original question, remember? Why do I have to pay taxes?
"The approach I favor would eliminate unemployment and poverty..."
You cannot eliminate poverty by printing currency. But you can easily destroy the fabric of society and functioning economy.
Hey, let's print currency and give every one a billion dollars. Hey, let's make it a trillion! Poverty gone!
After all, it worked so well in Zimbabwe. What could possibly go wrong?
I can't figure out whether you are amazingly naive or a political operative promoting a certain agenda. - WesMon, 06 Sep 2010 10:13:35 +0100other people's moneyhttp://www.cepr.net/index.php/blogs/beat-the-press/danger-danger-thomas-friedman-is-writing-on-economics-again#comment-2668
Wes,
The approach I favor would eliminate unemployment and poverty as there would never be insufficient purchasing power in society.
My view may not conflict with your interests to a great degree depending on your income level. Since taxes are an operation to drain money supply, I would think there would normally not be a need to tax middle income and below, at least not greatly. 'Tax and Spend' is a mis-characterization of my argument since I'm emphasizing spending and not taxes. Taxes are only needed to the extent the economy is over-heating - (which is a good thing).
If the economy overheats (which doesn't happen too often) then money may have to be drained. I think requiring holders of substantial wealth to deposit reserves at the Fed, similar to commercial banks, is a good way to drain excess money supply.
I don't believe the economic freedom of a few holders of great wealth should trump the needs of the great majority. 80% of the population has only 7% of financial wealth. This is far closer to serfdom than democracy. I don't see how we can justify a continuation of such a structure. I'm not in favor of centralized socialism. Democratic control over the money supply could be decentralized and very democratic.
Jim - JimMon, 06 Sep 2010 09:47:50 +0100...http://www.cepr.net/index.php/blogs/beat-the-press/danger-danger-thomas-friedman-is-writing-on-economics-again#comment-2667
Jim wrote:
"If the government can print dollars at no cost, then it would seem pretty clear that taxes and borrowings are not needed to fund government. They seem to provide just one function - reducing the money supply. "
Nice. So first you print money "at no cost", and then you tax people like me "to reduce the money supply".
I have a problem with your approach, Jim. Perhaps you expect to be on the receiving end of all this...
The problem with socialism is that it always runs of other peoples money. - WesMon, 06 Sep 2010 09:20:02 +0100The trouble with Dean's ideahttp://www.cepr.net/index.php/blogs/beat-the-press/danger-danger-thomas-friedman-is-writing-on-economics-again#comment-2666
Dean is right, but with two exceptions:
1. Central banks nowadays pay interest on reserves. Reserves increase when central banks monetise debt - so it is not quite debt free, just close to it.
2. There is a political problem with a large deficit, even if there is no real economic problem.
Just 'printing' the money (ie: a central bank helicopter drop to the treasury - a monetary gift) along the lines of Warren Mosler / MMT / Ricardo Caballero is an even better solution than what Dean proposes. - barrythompsonMon, 06 Sep 2010 08:41:54 +0100